Revealed Preferences for Macroeconomic Stabilization

David Kiefer Revealed preferences for macroeconomic stabilization

The Fraud of Macroeconomic Stabilization Policy

The details of the future will remain forever veiled to us. But give a gypsy seer a Ph.D. in economics and arm her with statistics and mathematical models, and people suddenly start taking her seriously. She will be invited to testify before Congress and held up by State TV as an expert in business forecasting. But from an analytical point of view, what she does is no different from what she di...

Stabilization versus Sustainability: Macroeconomic Policy Tradeoffs∗

Worldwide monetary and fiscal policies in the past few years have put into sharp relief the fundamental tradeoff between short-run stabilization and long-run sustainability that policymakers face. The paper is organized around this question: How do the effects of routine monetary and fiscal operations designed to achieve macroeconomic stabilization objectives change when the economy moves from ...

Interest Rate Rules and Macroeconomic Stabilization

High degrees of relative risk aversion induce indeterminacy in cashin-advance economies. This paper Þnds that Taylor-style policies can pre-empt such sunspot equilibria. SpeciÞc policy recommendations depend on the fundamentals of the economy, i.e. the empirically true value of coefficient of relative risk aversion. ∗This paper was written while I was aDFG Heisenberg Fellow. I would like to tha...

Revealed Reversals of Preferences

We weaken the implicit assumption of rational choice theory that imposes that preferences do not depend on the choice set. We concentrate on the cases where the preferences change monotonically when the choice set expands. We show that rationalizability is then equivalent to state the usual strong axiom of revealed preferences to the binary relation of "revealed reversals of preferences".